For the complete report, get in touch with us at : info@netscribes.com Indian economic growth is creating demand for third party logistics (3PL) services in the country. High cost of logistics, growing dependence on 3PL services from automobiles and auto components sector is expected to drive the demand for 3PL sector in India. Cost reduction coupled with high productivity by electronics manufacturers boosts the 3PL market. 3PL providers need to customize their services and charge competitive rates to benefit from the retail boom in India. The report begins with an introduction section, classifying the logistics sector into its three broad segments and highlighting the focus of the study. The evolution of the 3PL services is then projected. The 3PL workflow is also briefly highlighted. The change of functions based on logistics services is illustrated in the 3PL pyramid. Different types of 3PL providers are classified based on their functions. Advantages of outsourcing logistics services to third parties are also pointed out in this section. Market overview section provides a brief snapshot of both global and domestic 3PL market. To begin with, it gives a brief overview of global third party logistics market followed by its market size & growth. Considering the gross logistics revenue of top 50 global 3PL players the share of different continents is also found out. Major players in global 3PL market are identified and share of top 10 global 3PL players is also given. Subsequently, a brief overview of Indian 3PL market followed by its market size & growth is projected. The segmentation of 3PL market is given. The current and expected share of 3PL in total logistics is also shown. The increase in share of local companies outsourcing logistics services is depicted with top five reasons for outsourcing. The share of 3PL service providers in India is found out here. Further the respective sectors are analyzed wherein the customer’s propensity to outsource activities is more. Demand for 3PL services from various sectors and from different regions along with their share are also identified in this section. 3PL market presence in India is also mapped here.

1. Insert Cover Image using Slide Master View
Do not distort
Third Party Logistics Market – India
December 2012

2. Executive Summary
 More than half of the gross revenue generated in global Third Party Logistics (3PL) market were accounted by
Market top xx players in 2011
 3PL Market in India is estimated to reach around INR xx bn by 20‐‐ at a CAGR of nearly xx% during 2011 ‐16
 The market is rapidly evolving in India with more customers using outsourcing to reduce cost
Drivers Challenges
– Economic growth – Infrastructure Congestion
LE
Drivers & – High cost of Logistics in India – High Inventory Levels
Challenges – Growth in Consumer Electronics and Durables
P
– Lack of Skilled Manpower
Industry
– Lack of Trust and Awareness
M
– Growth in Auto & Auto Components Sector
A
– Growth in Retail Sector
Technology
S
– Phased implementation of VAT
– Infra related Govt initiatives
 Identification Technology – Barcode, RFID
 Material Handling Technology ‐ Automated Guided
 Communication Technology ‐ Global
Positioning System (GPS) Tracking
Adoption  Information Technology – ERP, eBizNET –
Vehicle System (AGVS) , Information directed System
SC suite, Vin eRetail
Major Players
Company A Company B Company C
Competition
Company D Company E Company F
Company G Company H Company I
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 2

3. •Introduction
•Market Overview
Global
India
LE
P
•3PL – Shipper Relationship
M
S A
•Drivers & Challenges
•Technology Adoption
•Competition
•Recent Transactions
•Strategic Recommendations
•Appendix
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 3

4. Evolution of 3PL
SAMPLE
1990s ‐ Present
1980s
1970s
• Higher
• Value‐added
outsourcing and
services such
• Importance more value‐
as packaging,
on improved added services
labeling,
1950’s & 1960s productivity, (VAS*) are being
systems
cost offered
support and
reduction inventory
• Logistics outsourcing and long‐
was limited to management
term were offered
transportation and contracts
warehousing
• Mainly short‐term
transactions
*VAS includes import/export management, customs clearance, clearance, freight forwarding, customer service, rate negotiation,
order processing, assembly/installation, distribution, order fulfillment, reverse logistics, consulting services that include
distribution network planning, site selection for facility location, fleet management, freight consolidation, logistics audit etc.
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 4

5. Demand for services of expert logistics outsourcing
providers is rising worldwide
Market Overview ‐Global Market Size & Growth
• Global Third Party Logistics (3PL) market is currently INR bn
valued at around INR xx bn 8,000 5.2%
x1 x2
• Major share of revenue generated is contributed by 6,000
Region A, Region B and Region C 4,000
• Factors contributing to the growth of global 3PL
market:
P LE
2,000
0
 xx
S A M 20‐‐ 20‐‐
Note: Market size considers global 3PL gross revenues and the conversion is done
using 2010 exchange rate
Global 3PL Revenues (2011)
a4%
a5% Region A
a1%
Region B
a3% Region C
Region D
Region E
a2%
Note: Gross Logistics Revenue of Top 50 Global 3PL players have been considered
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 5

6. Major Players in Global 3PL Market
SAMPLE
Share of Top 10 Global 3PL Players* (20‐‐)
a1% xx is the market
leader in global 3PL
market
a2%
a11% a3%
a4%
a6% a5%
a8%
a10%
a7%
a9%
Player A Player E Player I
Player B Player F Player J
Player C Player G Player K
Player D Player H
Note: *among the top 50 global 3PL players
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 6

7. Third party logistics is fast gaining popularity in the Indian
logistics market
Market Overview ‐India (1/3) Market Size and Growth
INR bn x6
xx% x5
• Third party logistics (3PL) market in India is at a
x4
LE
nascent stage, currently at around xx% of overall x3
x2
logistics market x1
• Findings
MP
S A
3PL Market Comprises of Two Segments
20‐‐ 20‐‐
Share of 3PL in Total Logistics
20‐‐ 20‐‐ 20‐‐ 20‐‐
20‐‐ 20‐‐e
Asset Based Non‐Asset Based
a1% b1%
 Own some of the assets  Does not own such assets
used in supply chain  Possess flexibility that
management which often allows them to respond to
a2% b2%
include trucks, distribution clients’ needs on a case‐by‐
centres and warehouses case basis xx xx
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 7

8. Cost considerations are the major reasons for the
outsourcing of various logistics services
Market Overview ‐India (2/3) Increase in Share of Local Companies Outsourcing Services
• Findings
% Share of local
60 x2 companies outsourcing
has increased by almost
xx times in xx years
40
LE
20 x1
MP 0
20‐‐ 20‐‐ Note: Approximate % share
Top 5 Reasons for Outsourcing Logistics Services
IMPACT S A Use of 3PL Services
Low Medium High
Logistics cost reduction Logistics cost goes
down by…
Focus on core competencies
Improved customer services
~xx%
Improve return on assets … thereby attracting more
customers in this sector
To increase inventory turn
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 8

9. 3PL Market Presence in India
North East
City A City J
City B City K
City C City L
City D City M
City E City N
City F
City G
City I
E
South West
City O City Y
P L City P City Z
M
City Q City A’
SA
City R City B’
City S City C’
City T City D’
City U City E’
City V City F’
City W City G’
City X
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 9

10. 3PL Market Insights (2/2)
• Highest demand for 3PL services comes from the Consumer electronics & durables and pharmaceuticals
• Region wise West accounts higher demand for 3PL services in India
Demand from Various Sectors (2011)
LE
Demand from Different Regions (2011)
a8%
MP b4%
A
a6% a7%
a1%
a4%
a4%
S b3%
b1%
a2%
a3%
b2%
Sector A Sector C Sector E Sector G
Sector B Sector D Sector F Sector H Region A Region C
Region B Region D
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 10

11. Changes in Use of 3PL Services Globally
Survey Result on Use of 3PL Services Worldwide
SAMPLE
Positive Responses on Increased Usage of 3PL Services
% Respondents % Respondents
100 x 100 y3 y4
y y1 y2
Survey results
50 50
0 0
3PL Shipper Region Region Region Region
A B C D
Positive Responses on Returning to In sourcing Positive Responses on Reduction of 3PLs Used
% Respondents % Respondents
40 p 100
m
q n
20 50 Result
Result
0 0
3PL Shipper 3PL Shipper
Note: 1,561 industry executives and managers representing users and non‐users of 3PL services (shippers respondents) and 697 executives and managers
representing firms that provide 3PL services (3PL respondents) across the globe were surveyed in “XX”
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 11

12. Shipper – 3PL Relationship
SAMPLE
Shipper’s Benefits from Use of 3PL Services
% Respondents
100 a4 a5
50 a3 Result
a1 a2
0
Benefit A Benefit B Benefit C Benefit D Benefit E
Success Factors
Openness, transparency & Flexibility to hold current & Interest in “gainsharing”
good communication future business needs between 3PLs & shippers
Result Result
Result
% Respondents % Respondents % Respondents
p m
100 100 60
x y q n
40
50 50
20
0 0 0
3PL Shipper 3PL Shipper 3PL Shipper
Note: 1,561 industry executives and managers representing users and non‐users of 3PL services (shippers respondents) and 697 executives and managers
representing firms that provide 3PL services (3PL respondents) across the globe were surveyed in “XX”
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 12

13. Drivers & Challenges
Drivers
Economic growth Challenges
High cost of Logistics in India
LE
Infrastructure Congestion
Growth in Consumer Electronics and
Durables Industry
MP High Inventory Levels
Growth in Auto & Auto Components
Sector
Growth in Retail Sector S A Lack of Skilled Manpower
Lack of Trust and Awareness
Phased implementation of VAT
Government Infrastructure Initiatives
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 13

14. Economic growth is creating demand for 3PL services and is
a major driver in the market
Economic Growth(1/2) Impact
• xx
P LE
SA M
Key Economic Indicators
GDP Growth Trend* Rapid Urbanization
% %
b4 b5
10 a3 40 b2 b3
a2 a5 b1
8 a1 a4 30
6
20
4
2 10
0 0
20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐
*Note: Figures for financial year – April to March
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 14

15. Simultaneous cost reduction coupled with high productivity
by electronics manufacturers will drive the 3PL market
Growth in Consumer Electronics and Durables Industry Impact
• xx
P LE
SA M
India’s Consumer Electronics and Durables Market Sales Trends in Consumer Electronics
‘000
INR bn xx%
20,000
600 xx% x2
15,000 b1
a1
400 x1 10,000
a2 b2
5,000 b3
a3
200 0 a4 b4
0 20‐‐ 20‐‐
20‐‐ 20‐‐ Type A Type B
Type C Type D
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 15

16. Growing dependence on 3PL services from automobiles and
auto components sector to facilitate market growth
Growth in Auto & Auto Components Sector
LE Impact
• xx
MP
Growth in Automobile Market
SA Growth in Auto Components Market
INR bn INR bn
a% a5
5,000 a4 10,000 c%
a3 b% b6
a1 a2 5,000 b5
b1 b2 b3 b4
0 0
20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐
Note: Auto components includes Engine Parts, Drive Transmission & Steering Parts,
Body & Chassis, Suspension & Braking Parts Equipments, Electrical Parts, Others
Growth in Passenger Car Exported from India Growth in Vehicles Sold in India
Type A
Units d% ‘000 Units e% e2% Type B
c2 2,000 d2 e3% e4% e5%
50,000 c1 d1 Type C
e6%
1,000 Type D
e1%
0 0 Type E
Type F
20‐‐ 20‐‐ 20‐‐ 20‐‐
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 16

17. 3PL providers need to customize their services and charge
competitive rates so as to benefit from India’s retail boom
Growth in Retail Sector Impact
• xx
P LE
S A M
Growth in Retail Market in India
60
8.4% y
40 y2%
x
20 x2% y1%
x1%
0
20‐‐ 20‐‐e
Type A Type B
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 17

18. Poor and inadequate infrastructure acts as a major obstacle
to growth of 3PL market in India
LE
Infrastructure Congestion
•xx
MP Impact
S A
Average speed of Commercial Vehicle (20‐‐)
kmph Result
100 y
50 x
0
Country A Country B
• xx
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 18

19. Lack of trust and awareness is hampering the growth of 3PL
sector
Lack of Trust and Awareness Impact
• xx
P LE
3PL Activity as % of Total Logistics Operations (20‐‐)
80
%
y
z
SA M
60 x Vicious Cycle
40
w
20
0
xx
Country A Country B Country C Country D xx
xx
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 19

20. 3PL is witnessing better productivity with rising investments
in GPS, RFID, online analytics & new supply chain tools
• xx
LE
MP
SA
Applications
Enterprise
Identification Competitive Communication
• xx Technology Technology • xx
Advantage
Handling
Material
• xx
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 20

21. Major Public Companies – Summary
Net Profit/Loss
2,800
Size of the Bubble represents Market
2,600 Capitalization in INR bn
2,400
m1
2,200
LE
2,000
MP
A
1,800
1,600
1,400
m2
m3
S m4
1,200
1,000
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000
Total Income
Company A Company B
Company C Company D
Note: All figures are in INR mn and are based on the latest financials available
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 21

22. Public: Domestic Company – Player A (1/3)
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
LE
Ticker Symbol
MP
A
Stock Exchange
Mumbai Head Office
Products and Services
Category Products/Services
S Key People
Name Designation
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 22

23. Public: Domestic Company ‐ Player A (2/3)
Financial Snapshot Key Ratios
y‐o‐y change
Total Income Net Profit/Loss INR mn Particulars 2012 2011 2010 2009
INR mn (2012‐11)
35,858.4 Profitability Ratios
40,000 34,381.0 3000
28,803.1 Operating Margin ‐0.19 8.78% 8.97% 7.61% 8.01%
30,000 Net Margin 0.06 6.54% 6.48% 5.76% 6.24%
20,836.4 2000
20,000 Profit Before Tax Margin ‐0.15 8.44% 8.58% 7.77% 8.13%
1000 Return on Equity 0.48 15.42% 14.94% 13.74% 13.07%
10,000
Return on Capital Employed 1.52 14.71% 13.18% 13.53% 13.95%
LE
0 0 Return on Working Capital ‐11023.91
‐
50.35% 46.22% 36.95%
10973.56%
2009 2010 2011 2012
P
Return on Assets 0.32 8.27% 7.95% 8.07% 8.62%
Financial Summary Return on Fixed Assets 4.55 16.76% 12.20% 19.68% 23.75%
M
Cost Ratios
• The company earned a net profit of INR 2,345.9 mn in FY 2012, as
A
Operating costs (% of Sales) 0.19 91.11% 90.92% 92.34% 91.90%
compared to net profit of INR 2,228.7 mn in FY 2011
S
Administration costs (% of
17.24 17.24% 0.00% 6.07% 8.64%
• The company reported total income of INR 35,858.4 mn in FY 2012, Sales)
registering an increase of 4.3% over FY 2011 Interest costs (% of Sales) 0.03 1.65% 1.62% 0.68% 1.12%
• The company earned an operating margin of 8.78% in FY 2012, a Liquidity Ratios
decrease of 0.19 percentage points over FY 2011 Current Ratio ‐48.94% 1.00 1.95 1.82 2.13
Cash Ratio ‐43.37% 0.26 0.47 0.63 0.83
• The company reported debt to equity ratio of 0.86 in FY 2012, a
Leverage Ratios
decrease of 1.63% over FY 2011
Debt to Equity Ratio ‐1.63% 0.86 0.88 0.70 0.52
Key Financial Performance Indicators Debt to Capital Ratio ‐20.15% 0.27 0.34 0.24 0.17
Interest Coverage Ratio ‐3.90% 5.39 5.61 11.27 7.20
Indicators Value (27/11/2012) Efficiency Ratios
Market Capitalization (INR mn) xx Fixed Asset Turnover 35.97% 2.53 1.86 3.39 3.77
Total Enterprise Value (INR mn) xx Asset Turnover 3.01% 1.25 1.21 1.39 1.37
Current Asset Turnover 36.26% 5.10 3.74 3.59 3.11
EPS (INR) xx
Working Capital Turnover ‐21677.73% ‐1655.74 7.67 7.97 5.86
PE Ratio (Absolute) xx
Capital Employed Turnover 2.23% 2.33 2.28 2.37 2.07
Improved Decline
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 23

24. Public: Domestic Company ‐ Player A (3/3)
Key Business Segments Key Geographic Segments
Container Freight Stations Multimodal Transport Operations Australia & New Zealand Mediterranean Far East Europe
Project & Engineering Solutions Africa America India
%
%
100% 6% 7% 7% 2% 2% 2%
10% 10% 100% 2%
16% 6% 2%
16% 18% 5% 19% 4%
LE
50% 94% 83% 83% 50% 28% 27% 15% 29% 15%
P
30% 31% 29%
0% 0%
M
2008 2009 2010 2008 2009 2010
Business Highlights
Description
Overview
News
S A
3PL & Warehousing
Acquisitions
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 24

25. Recent Transactions
Transactions in 3PL Companies in India
SAMPLE
Deals & Investments in 3PL firms
Date Target Acquirer/Investor Amount (INR mn) Stake
Jul‐12 Company 1 Company 13 xx xx
Apr‐12 Company 2 Company 14 xx xx
Feb‐12 Company 3 Company 15 xx xx
Dec‐11 Company 4 Company 16 xx xx
Jul‐11 Company 5 Company 17 xx xx
Apr‐11 Company 6 Company 18 xx xx
Feb‐11 Company 7 Company 19 xx xx
Oct‐10 Company 8 Company 20 xx xx
Oct‐10 Company 9 Company 21 xx xx
Sep‐10 Company 10 Company 22 xx xx
Jun‐10 Company 11 Company 23 xx xx
Mar‐10 Company 12 Company 24 xx xx
Note: This list is not exhaustive
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 25

26. Strategic Recommendations (1/3)
Issues Recommendations
Lack of 3PL operators in X • xx
LE
Less X service logistics providers • xx
MP
Non‐compliance of best practices
S A
• xx
by Y
ZZ imposed on shipping lines
• xx
which consumes up their profit
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 26

27. Thank you for the attention
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Logistics Series.
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THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT 27